According to the judge’s interpretation of the New York City law, only employees can bring harassment claims against employers, and since unpaid interns don’t receive any of the benefits of employment, they are not employees.

Unpaid interns have been in the news and in our studios challenging the fairness of the promise of free work in exchange for on-the-job training. They're not covered by the requirements of labor laws. And now, a New York judge has ruled that unpaid interns are not covered by sexual harassment laws. A U.S. district court found that a 26-year-old woman was an intern and not a company employee when she filed a sexual harassment suit against her former employer, the Chinese language media company, Phoenix Satellite Television U.S. And therefore, she was not covered by New York's Human Rights Law.

Derek Thompson is The Atlantic's business editor. He helps us unscramble stories like this one. And, Derek, this young woman claims that she was touched and held inappropriately by her boss, but that was her boss. So why isn't she considered an employee? What's the definition?

DEREK THOMPSON: Right, exactly. If this happened to an employee, it would certainly constitute sexual harassment, it seems. But instead, it happened to an unpaid intern, so it legally constitutes as basically nothing under New York City law, under the New York City Human Rights Act. And this takes its cue from Title VII of the Civil Rights Act, if you want to look it up. And this essentially says that employers can't discriminate against their workers. And the courts have said that sexual harassment is discrimination by sex, so it's illegal under federal law.

But here's the thing. If you're not paid, you're not legally an employee. And if you're not legally an employee, you can't sue for sexual harassment under this law anymore than you could say sue a stranger on the street for whistling at you. There isn't standing.

YOUNG: Well, if an intern receives any amount of money - I mean, some are paid, and that would change the equation. But let's say an intern gets a stipend, would she then be considered an employee?

THOMPSON: This is really, really confusing. You would think an employee is an employee is an employee, but it's not that simple under the law. If I go to Craigslist and I say, hey, can somebody come over and help me do my taxes and fix my cabinet, please, do I legally become their employer? Can I be sued under the civil rights act? It's a hard question. What the law technically says is, when you're a student by - in a college - say, you're 22 years. You're sent to intern at a magazine, you are technically an employee. But the second you graduate and take that unpaid internship, you're not technically employee. It's, frankly, a complete and utter mess.

And that's one reason why, I think, the simplest solution here, the Occam's razor solution would be to simply say and acknowledge that the vast majority of unpaid internships at for-profit companies are illegal under national law.

YOUNG: I have...

THOMPSON: At least people deserve to be paid.

YOUNG: I have to ask, Occam's razor?

THOMPSON: Yeah. I'm sorry. It's the very simplest solution.

(LAUGHTER)

YOUNG: Yeah.

THOMPSON: This is the very simplest thing you can possibly do.

YOUNG: Right, right. And some states are deciding that. In June, Oregon became the first and only state to extend sexual harassment protection to unpaid interns.

THOMPSON: Right. And D.C. has, sort of, made similar strides here. And, you know, right, it's up to the states and the cities to pass their own laws. There's nothing at the federal level that says you can't say that unpaid interns are employees, but the law is a mess from the beginning. And I think, as you alluded to, you know, technically, the Department of Labor says that unpaid internships have to be, you know, educational. They must be for the benefit of the intern. They cannot, in any way, benefit the company. This is absurd.

YOUNG: Yeah. Yeah.

THOMPSON: If you're familiar with how any unpaid internship works, of course, it's for the benefit of the company.

YOUNG: Right.

THOMPSON: That's precisely the point.

YOUNG: Well, meanwhile, this young woman also alleges not only was she harassed, but that she was not given a job because she claimed. So she still - because she made a claim. So she still has another avenue for a suit?

THOMPSON: Right, right. She does have standing under what's called failure to higher law. So there, essentially, you can sue, saying I was not hired because of discrimination. So you don't have to be a paid employee to have a standing under that law, and that's why she has taken up that suit.

YOUNG: And it's why so crazy, that you have standing under one but not the other.

THOMPSON: Exactly, right.

YOUNG: Derek Thompson, business editor at The Atlantic. Thanks as always, Derek.

THOMPSON: Thank you.

YOUNG: And when we come back, Jeremy Hobson will be back in Phoenix. That's in a minute. HERE AND NOW. Transcript provided by NPR, Copyright NPR.